ACA Repeal Legislation: What Bills Have Been Introduced?

The AHCA, Along with Other GOP Bills Proposed to Replace Obamacare

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When Donald Trump won the presidential election in 2016, the future of the Affordable Care Act (the ACA, otherwise known as Obamacare) was suddenly up in the air. Trump's first executive order, issued just hours after his inauguration, was focused on "minimizing the economic burden of the Affordable Care Act," and directed federal agencies—like the IRS and HHS—to be as lenient as possible when enforcing ACA penalties and regulations.

Initially, in November and December, the legislative focus seemed to be on repealing the ACA as quickly as possible in the 2017 session, using a reconciliation bill that wouldn't subject to filibuster and could pass with only 51 votes in the Senate (reconciliation bills are limited, however, in that they can only address government spending, so a reconciliation bill to repeal the ACA would actually only be able to repeal the spending-related aspects of the law).

The legislation was expected to resemble 2015's H.R.3762, which was vetoed in early 2016 by President Obama, but would have otherwise repealed most spending-related provisions of the ACA with a two-year implementation delay (in other words, the legislation would have been enacted in early 2016, but most of the repeals would have taken effect as of 2018). The idea is that the two-year implementation delay would give Congress time to enact a replacement with a seamless transition.

As soon as the 2017 legislative session began, Senator Mike Enzi (R, Wyoming) introduced a budget resolution directing four congressional committees to begin drafting a reconciliation bill to repeal spending-related parts of the ACA. The non-binding resolution, S.Con.Res.3, passed both chambers of Congress before Trump's inauguration, and the committees began working on the bill.

The AHCA Passed the House on May 4, 2017

On March 20, the House introduced the American Health Care Act (AHCA), which was the legislation created as a result of January's budget resolution (the draft of the legislation became available on March 6, but it wasn't formally introduced until March 20). The AHCA is a reconciliation bill, so it can't address many aspects of the ACA. But it is quite different from H.R.3762 in a lot of ways. The AHCA was marked up in committee hearings the same week it was introduced, and numerous amendments were added over the ensuing six weeks, before the measure passed in the House on May 4, by a vote of 217 to 213.

The Congressional Budget Office projected that the AHCA would reduce the federal deficits by $337 billion, but would result in the uninsured population growing by 24 million over the next decade. The CBO issued a new analysis of the legislation after it was amended on March 20, estimating that the altered legislation would only reduce the federal deficits by $150 billion, but would still result in the uninsured population growing by 24 million people. Several additional amendments were added in April and May, but the House voted on the measure before the CBO had time to complete their analysis of the impact of those amendments.

The AHCA was initially scheduled for a vote on March 24, but was pulled after several hours of debate that day, when it was apparent that there wasn't enough support to pass it. The amendments that were introduced over the following weeks were an effort to shore up support for the legislation, and ultimately did result in its passage by a very narrow margin, on May 4.

The AHCA was sent to the Senate after it passed the House, but the Senate has said that they'll likely write their own bill, incorporating as much of the AHCA as possible. The two chambers would then have to reconcile any differences in their bills before sending a final piece of legislation to the president for his signature.

Here's what's in the AHCA, as of when it passed the House:

  • It repeals the ACA's premium tax credits after 2019, and replaces them with premium tax credits that are adjusted based on age, and that extend to people with higher incomes. The ACA's tax credits are larger for people with smaller incomes, and they're larger in areas where health insurance is more expensive. The AHCA's tax credits would be the same for a person earning $20,000 or $70,000, and would only vary based on age. The overall impact would be smaller average premiums. And lower income and poorer people would get less than they get under the ACA, while younger people and those with higher incomes would get more
  • Medicaid expansion would remain in place through 2019, but would be frozen after that. New enrollees would not be able to join, and people who lost eligibility would not be able to re-enroll later on. States that hadn't expanded Medicaid by March 1, 2017, would not have been eligible to expand Medicaid with the enhanced federal funding that the current expansion states are receiving (essentially, the 19 states that haven't expanded Medicaid would no longer have any financial incentive to do so if the AHCA is enacted as-is). Medicaid would also be switched from the current open-ended federal matching to a per-capita allotment or block grants from the federal government.
  • The individual mandate penalty would be eliminated, retroactively to the start of 2016. Instead, the AHCA relies on a "continuous coverage" provision: After the 2018 open enrollment period (proposed for November 1, 2017, through December 15, 2017), anyone who enrolls in an individual market plan following a gap in coverage of at least 63 days would have been charged premiums 30 percent higher than the standard rates, for 12 months. Alternatively, as part of the MacArthur Amendment that was added to the AHCA, states would be able to seek waivers that would allow insurers to increase premiums based on medical history (as opposed to a flat 30 percent regardless of health status) for individual market applicants who had a gap in coverage. As with the 30 percent rate increase, the higher premiums based on medical history would remain in place for a year.
  • Most of the ACA's consumer protections would be changed, since the AHCA is a reconciliation bill that only addresses spending-related measures (GOP lawmakers have said that other provisions would be addressed in later phases of their health care reform plan, but non-reconciliation bills would need 60 votes in the Senate to be filibuster proof). However, the MacArthur Amendment also allows states the flexibility to seek waivers to change the scope of what's considered an essential health benefit, and to increase the age band ratio rules beyond the 5:1 ratio called for in the AHCA (the ACA only allows a 3:1 premium ratio for older versus younger enrollees).
  • Coverage would still technically be guaranteed-issue regardless of medical conditions, but as noted above, people in some states who purchase a plan in the individual market after having a gap in coverage could see sharply higher premiums as a result of their pre-existing conditions. Pre-existing condition waiting periods and exclusions would be prohibited, however.  Lifetime and annual benefit maximums would continue to be prohibited for essential health benefits, and out-of-pocket maximums would still have to be capped for essential health benefits. But as noted above, states would have the option to reduce the scope of essential health benefits, which would weaken the protections the apply to out-of-pocket limits and lifetime and annual benefit maximums.

May 2017: Senate Will Consider AHCA

The AHCA passed the House on May 4 and headed to the Senate. But from the beginning, the legislation did not have widespread support from stakeholders or even the full cadre of GOP lawmakers. The American Medical Association, AARP, and the American Hospital Association, along with many other organizations, have spoken out against the AHCA. Democrats in Congress universally opposed the AHCA, but even Republicans were split. Some conservative Senate Republicans believe that the AHCA doesn't go far enough in quickly repealing the parts of the ACA that they consider onerous (refundable premium tax credits and Medicaid expansion, for example).

And on the other end of the spectrum, some moderate Republican Senators have expressed reservations or outright unwillingness to repeal the ACA's Medicaid expansion and to implement legislation that would make coverage more expensive for older and lower-income Americans.

Now that the measure is with the Senate, it faces more of a challenge than it did in the House. Even using reconciliation (which only requires 51 votes to pass, rather than 60), the Senate can only afford to lose two Republicans if the bill is to pass. As soon as the AHCA passed the House, the Senate indicated that they would likely write their own measure, taking guidance from the AHCA, rather than simply amend the AHCA. So there could still be a significant legislative process with this bill, and it's future is far from certain in the Senate.

Other Health Care Reform Legislation

While the attention has been focused on the AHCA since early March, several other bills have been introduced in the 2017 session, all aimed at replacing or changing the ACA or various parts of it (you can use this tool from the Kaiser Family Foundation to compare some of them side-by-side)

Let's take a look at some of the bills that had already been introduced in 2017 prior to the AHCA, and what impact they would have. If the Senate doesn't pass the AHCA—or another measure with which the House concurs—one of these bills could end up being reconsidered in 2018, as Republican lawmakers are unlikely to drop their efforts to repeal the ACA, even if their 2017 attempt isn't successful.

Senate Bills

The Patient Freedom Act

The Patient Freedom Act was introduced on January 23, 2017, by Senators Bill Cassidy (R, Louisiana) and Susan Collins (R, Maine).

The bill is more of a compromise than other Republican proposals that have been floated over the last several years, as it gives states the option to keep the ACA as-is, or switch to a new system with more state flexibility. But a compromise bill might not end up getting enough support from either side of the aisle, and replacement legislation will need to get at least 60 votes in the Senate to overcome a filibuster.

The Patient Freedom Act would essentially transfer much of the decision-making process to the states and would give them three options (with the ability to switch annually from one option to another):

  1. Keep the ACA as-is.
  2. Most provisions of the ACA would be repealed, but 95 percent of the money that would have been spent to pay for premium subsidies, cost-sharing subsidies, and Medicaid expansion in the state would be used to fund Roth Health Savings Accounts (Roth HSAs) for eligible state residents. Uninsured residents would be auto-enrolled in basic high-deductible health plans (auto-enrollment would take the place of the individual mandate).
  3. Most provisions of the ACA would be repealed, and the state would be in control of designing and maintaining a new system (without the requirements outlined in Option 2). But the state would not receive any federal funding.

Regardless of which option a state chooses, the Patient Freedom Act would continue some of the ACA's consumer protections: Lifetime and annual benefit limits would be prohibited, as would pre-existing condition exclusions. Coverage would continue to be guaranteed-issue, and young adults would continue to be allowed to remain on a parent's health plan until age 26. The Patient Freedom Act would not require health plans to cover all of the ACA's essential health benefits, but it would require coverage for mental health and substance abuse treatment.

Cassidy and Collins expect that most states would pick Option 2. It allows more state flexibility in terms of plan oversight and coverage requirements, but it also provides significant federal funding that would be deposited in residents' Roth HSAs.

The Patient Freedom Act would end the use of traditional HSAs and would replace them with Roth HSAs. Currently, HSA contributions are tax deductible, but they're limited (in 2017) to no more than $3,400 for a single individual, or $6,750 for a family.

Contributions to Roth HSAs would not be tax deductible but people would be able to contribute up to $5,000 per person (so a family of four would be able to contribute $20,000 in a year, which is far in excess of the $6,750 they can contribute today to a traditional HSA).

The contributions would grow tax-free over time, and could be withdrawn tax-free to pay for medical expenses (these aspects of Roth HSAs would be the same as traditional HSAs).

The Patient Freedom Act doesn't say exactly how much the government would contribute to each person's Roth HSA. They anticipate that it would be a substantial amount, but eligibility for the government contributions would extend even to people with relatively high incomes, spreading the funding across a larger population than the ACA does.

The money in the Roth HSAs (including government contributions and individual contributions) could be used to pay for health insurance premiums as well as out-of-pocket expenses.

The Obamacare Replacement Act

Senator Rand Paul (R, Kentucky) introduced the Obamacare Replacement Act (S.222) the day after Cassidy and Collins unveiled their bill. 

Senator Paul has been outspoken in his belief that it would be irresponsible for Congress to pass legislation to repeal the ACA without concurrent legislation to replace it (he was the only Senate Republican to vote no on S.Con.Res.3; despite his belief that the ACA should be repealed, he doesn't want to proceed with repeal legislation that doesn't include replacement legislation).

Paul was also at odds with his Republican colleagues in the days leading up to the release of the AHCA, decrying the fact that the bill was being drafted in secret (bills are not typically public until they're introduced in committee, but Paul wanted to see the legislation that House Republicans were drafting). 

In continued opposition to the AHCA, Paul has called it "Obamacare-Lite" and has reiterated his desire for full repeal of the ACA instead.

Here's how Paul's Obamacare Replacement Act would work:

  • Many of the ACA's mandates would be repealed, including the individual and employer mandates, the guaranteed-issue and community rating provision, and the essential health benefits requirement. As a result, people would not have to buy insurance, employers would not have to provide insurance, health insurance companies would be able to deny applications or increase premiums based on applicants' medical history, and plans that lack coverage for various essential health benefits would be available for purchase (those plans would be less expensive, but would also leave consumers without coverage if they ended up needing treatment that wasn't covered by the plan).
  • There would be a two-year initial open enrollment period during which people with pre-existing conditions would be able to purchase coverage in the individual market. After that, coverage would only be guaranteed issue (with no medical underwriting) for people who maintain continuous coverage. For people who get insurance from an employer, HIPAA rules would apply, meaning that plans could impose pre-existing condition waiting periods for new enrollees who hadn't maintained continuous coverage prior to enrolling in the employer's plan.
  • Individuals who purchase their own health insurance would be allowed to deduct the premium cost from their income and payroll taxes (currently, the rules are more restrictive for those who purchase individual health insurance, while those with employer-sponsored health plans can use pre-tax funds to pay their premiums).
  • There would be a non-refundable tax credit of up to $5,000 to incentivize contributions to Health Savings Accounts (HSAs). Non-refundable means that the credit would only be available to offset the amount of tax that the person owes, and couldn't be larger than the taxes a person owes for the year. This is in contrast to the ACA's premium subsidies, which are a refundable tax credit; if the ACA tax credit is more than you owe in taxes, the IRS will give you the difference.
  • There would no longer be an upper limit on how much you could contribute to an HSA. HSA contributions could be made even by people who aren't covered under high-deductible health plans, and HSA funds could be used to pay health insurance premiums.
  • Health insurers would be able to sell plans across state lines. The bill notes that state laws governing health insurance products would be superseded, so that states would not be allowed to block out-of-state sub-par plans from selling coverage within the state.

The ObamaCare Repeal Act

On January 12, Senator Ted Cruz (R, Texas) introduced S.106, the ObamaCare Repeal Act. It's a one-page bill that simply calls for the Affordable Care Act to be fully repealed as of January 1, 2018, with everything returning to the way it would have been if the ACA had never been enacted.

This bill would never get the level of bipartisan support needed to pass, but it's an opportunity for Senator Cruz to go on record as having introduced a measure to fully repeal the law, thus appealing to his constituents who want to see the ACA repealed.

House Bills

Several additional bills were introduced in the House of Representatives in January, each aimed at repealing or changing specific aspects of the ACA or how it's implemented:

H.R.708, the "State Age Rating Flexibility Act of 2017," introduced by Rep. Larry Bucshon (R, Indiana, 8th District). This bill would take effect January 2018, and would allow health insurance carriers to use a five to one ratio when pricing plans for older enrollees. In other words, a 64-year-old applicant could be charged up to five times as much as a 21-year-old applicant. The ACA limits the ratio to no more than three to one.

H.R.628, the "Guaranteed Health Coverage for Pre-Existing Conditions Act of 2017," introduced by Rep. Rodney Davis (R, Illinois, 13th District). This bill is designed to protect people from coverage denials or exclusions due to pre-existing conditions. It would take effect if and when the ACA is repealed. It would require group and individual health plans to accept all applicants, without pre-existing condition exclusions. Like the ACA, it would allow insurers to have annual open enrollment periods and special enrollment periods triggered by qualifying events.

H.R.710, the "Health Coverage State Flexibility Act of 2017," introduced by Rep. Bill Flores (R, Texas, 17th District). This bill would take effect in January 2018, and would shorten the grace period for overdue health insurance premiums. Under the ACA, people who are receiving premium subsidies have a three-month grace period if they fall behind on their premiums (they have to get them fully paid up by the end of the three months; they cannot be perpetually three months behind). H.R.710 would shorten the grace period to 30 days, unless state law has a different grace period. Essentially, the grace period would be the same for everyone, regardless of whether they're receiving subsidies (currently, the grace period in most states for people who aren't receiving subsidies is roughly 30 days).

H.R.706, the "Plan Verification and Fairness Act of 2017," introduced by Rep. Marsha Blackburn (R, Tennessee, 7th District). This bill would require people enrolling through the exchanges outside of open enrollment (i.e., during a special enrollment period triggered by a qualifying event) to provide proof of the qualifying event. This has been a contentious issue for the last few years, and the federal government stepped up verification of qualifying events in 2016 amid concerns that people could potentially be "gaming the system" when verification was not required.

H.R.184, the "Protect Medical Innovation Act of 2017," introduced by Rep. Erik Paulsen (R, Minnesota, 3rd District). This bill would repeal the ACA's medical device tax, for all sales made after December 31, 2017.

H.R.173, the "Middle Class Health Benefits Tax Repeal Act of 2017," introduced by Rep. Mike Kelly (R, Pennsylvania, 3rd District). This bill would repeal the ACA's Cadillac tax. It would take effect in 2018, although the Cadillac tax itself isn't scheduled to apply until 2020.

H.R. 247, the "Health Savings Account Expansion Act of 2017," introduced by Rep. Dave Brad (R, Virginia, 7th District). This bill would increase the maximum contribution amounts for HSAs, and would allow people to contribute to an HSA even if they don't have a high-deductible health plan. It would also allow people to use HSA funds to pay health insurance premiums, allow HSA funds to once again be used for over-the-counter medications, and decrease the penalty that's charged when people use HSA funds for non-medical expenses (it's currently 20 percent, and would revert to 10 percent, the way it was prior to the ACA).

H.R.285, the "Health Care Tax Relief and Mandate Repeal Act," introduced by Rep. Michael R. Turner (R, Ohio, 10th Distrit). This bill would repeal the ACA's individual mandate and employer mandate. So people would not be required to maintain health insurance, and employers would not be required to provide it.

All of those bills are aimed at specific provisions of the ACA, or the ways in which the law has been implemented via subsequent regulations (for example, HHS was tasked with establishing the specific requirements and details for special enrollment periods, and initially opted to use the honor system rather than requiring proof of qualifying events).

A Word From Verywell

The AHCA is now with the Senate, and we don't know what its future might be. We can't say for sure that the ACA will ever be repealed or replaced, although that's the general goal for most Republican lawmakers and they hold a majority in both chambers of Congress.

But the party has not coalesced around a solution, and there's considerable disagreement among Republicans Senators in terms of the path forward. Democratic lawmakers have vowed to block ACA repeal in any way they can, and as long as they can get three Republican Senators to agree with them, repeal legislation will not be able to pass.

For the time being, nothing has changed, and the ACA is still the law of the land. 

Sources:

Cassidy.Senate.gov. Patient Freedom Act. A Bill to improve patient choice by allowing States to adopt market-based alternatives to the Affordable Care Act that increase access to affordable health insurance and reduce costs while ensuring important consumer protections and improving patient care. Introduced January 23, 2017.

Congress.gov. S.106. ObamaCare Repeal Act. Introduced January 12, 2017.

Congress.gov. S.222, Obamacare Replacement Act. Introduced January 24, 3017.

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